GST Portal launches Machine Registration form of Pan Masala and Tobacco Company to curb Tax Evasion

Pan masala and gutka manufacturers now must register their machines on the goods and services tax (GST) portal as part of the government’s efforts to reduce tax evasion in this sector.

The GST portal has already released one form for this, and another will be issued shortly. “To begin with, the GST Portal now allows users to register machines and file information in Form GST SRM-I. All taxpayers who deal in the commodities indicated in the notification may utilize the facility to file information about machines. Form GST SRM-II will also be made available on the portal shortly,” according to the notice on the portal.

Form GST SRM-I deals with machine registration and disposal, whereas Form GST SRM-II requests information on inputs and outputs for a given month.

The Central Board of Indirect Taxes and Customs notified a unique method for pan masala and tobacco businesses to register packing machinery and file returns in January this year, in accordance with a GST Council decision.

All of these vendors would be required to provide details of the packaging machines used for package filling on the GST portal within 30 days of the notification going into effect, which is April 1, 2024. The deadline was later extended to May 15.

To ensure compliance with this provision by the evasion-prone sector, the Finance Act of 2024 includes a penalty under which pan masala and tobacco firms who fail to register their packaging machines with GST authorities are liable for a Rs.1 lakh fine per machine. The machine could possibly be seized by the GST authority. The penalty provision, however, has yet to be notified.